Conditions

Question 1

Define a Condition (RS 224):

Answer 1

A condition is an event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.

Question 2

What are the two types of conditions?

Answer 2

1) Expressed

2) Implied

Question 3

What are two types of Expressed Conditions and what are each type?

Answer 3

1) Precedence - activates the contract

2) Subsequent - Terminates the Contract

Question 4

Where do implied conditions comes from?

Answer 4

They are supplied by the court

Question 5

What are the 3 types of “orders of performance” for the parties in conditions?

Answer 5

1) Independent of each other;
2) Dependent of each other.
3) Mutual or concurrent

Question 6

What is required of both parties for a mutual or concurrent condition?

Answer 6

Both parties must be ready, willing, and able to perform.

Question 7

What is the function of a condition?

Answer 7

To allocate risk

Question 8

What is the legal consequence of a condition?

Answer 8

1) Excuse performance (precedent)

2) terminate performance (subsequent)

Question 9

Can the passage of time be a condition?

Answer 9

No, the mere passage of time is not a condition, because there is no uncertainty. Time will pass whether we like it or not.

Question 10

What happens if a condition precedent does not occur?

Answer 10

The non-occurrence of a condition precedent by a party to a k, allows rescinding by the adversely affected party.

Question 11

What occurs when parties have multiple different contracts and a party breaches one of the contracts?

Answer 11

Breaking one contract does not necessarily mean a breach of all contracts between the parties UNLESS there is a cross default condition which means that the satisfied conditions in the two contracts are connected and a breach in one results in a breach of both.

Question 12

If language is unclear between creating a duty or a condition then which will the court tend to choose and why?

Answer 12

If language is unclear, a court will prefer an interpretation that imposes a duty rather than a condition because in this situation a court can step in immediately to assist with a duty, but not with a condition.

Question 13

What is common language of a duty?

Answer 13

Required, must, promise, shall, mandatory

Question 14

What is common language of a condition?

Answer 14

If-Then, based upon, contingent, Under the condition that…, depending upon.

Question 15

Who makes the decision as to a decision:

1) of the meaning of language within a contract;
2) The interpretation of the document and parties intentions?

Answer 15

1) The meaning of the language is a factual decision for the jury to decide
2) The interpretation of the document and the parties intention is a decision of law which is a judges decision.

Question 16

Under satisfaction clauses what type of things are held to:

1) the objective standard?
2) Subjective standard?
3) Third Person standard?

Answer 16

1) Objective standard is held to the reasonable person standard and is used for items of value, fitness, and quality.
2) The subjective standard is a decision of judgement and is used for fancy, taste or judgement.
3) The third person standard is used when an architect, engineers, etc. has the final say and must sign off on the item.

Question 17

What is a claim of dissatisfaction made in to be held valid?

Answer 17

It must be made in good faith rather to escape a bad bargain to be deemed valid.